Survey Says: Hospitals Struggle with RCM, Impacting the Bottom Line

Hospitals and health systems are struggling to make the most of their revenues in the ever-changing healthcare landscape. A steady stream of mergers, lack of interoperability, the shift to value-based care, and other challenges are prompting health systems to focus on improving their revenue cycle management (RCM).

Dimensional Insight recently surveyed health systems to assess their current tools and challenges within RCM. The results highlight the complexity of tracking and gathering data throughout the revenue cycle, especially for organizations with multiple EMR and/or RCM solutions. Here are some of the survey’s highlights and as well as a few thoughts on what they mean for health systems.

The survey, conducted in early 2018 by Dimensional Insight and HIMSS Analytics, asked 117 C-suite and other senior decision makers 12 questions about their RCM. RCM is an umbrella under which all revenues are managed and maximized, a process that begins with a patient’s first point of contact with a health system and extends until all bills are reconciled, usually long after treatment is complete.

“Coordinating this complex combination of business processes, systems, and humans resources — so many people with different skills — is a significant challenge,” says George Dealy, Dimensional Insight’s vice president for healthcare applications. Survey results show the pain points.

Multiple vendors at work

The survey found most health systems rely, at least in part, on the EMR for RCM. More than two-thirds (70.9%) use their EMR solutions for revenue cycle management. In addition, most (69.9%) utilize multiple vendors for RCM purposes. This is true of health systems that leverage their EMR for RCM and those that use other solutions.

Denials pose the biggest challenge

Denials topped the list of health systems’ challenges within RCM, with 76.1% naming denials as the biggest challenge. Revenue integrity (36.8%) and patient pay (34.2%) were next on the list.

Interestingly, the survey found that health systems using multiple RCM solutions often report bigger problems with denials. The highest rates of problems with denials (100%) were reported by health systems using their EMR plus one or two other solutions.

“Managing denials well invariably requires clear visibility across business processes and systems. You won’t have that without effective integration and interoperability,” George says. “While it makes sense for RCM functions to be directly integrated into the providers’ workflows and EMRs, there will always be aspects of the revenue cycle that the EMR doesn’t handle optimally. That leads to the need for multiple solutions – and the accompanying integration challenges.”

Disparate sources are a pervasive problem

Nearly all respondents — 97.8% — said collecting data from disparate sources is a challenge for revenue reimbursement. Of them, 65.2% called it moderately challenging, while 32.6% said it is extremely challenging. A mere 2.3% of the respondents said collecting data from disparate sources is not a challenge!

The survey also probed which factors contribute to issues with revenue integrity. Health systems cited lack of interoperability and some information being left in silos as the biggest factors. Both were cited 67.4% of the time. Another 30.2% of respondents said key stakeholders do not trust the data.

Bottom line

“It’s pretty clear that there are opportunities for improvement” in RCM for health systems, says George. “But this is a complex set of problems to solve – otherwise it would have been solved already.” He predicts technology will be a big part of the solution, along with an examination and improvement of the human side of workflows.

The survey revealed current technologies are creating a patchwork of solutions. This arrangement does not seem to be working particularly well, with health systems executives noting pervasive problems with denials and collecting data from disparate sources. A lack of interoperability is not just a clinical or operational problem. It is a major obstacle in RCM, and one that is hurting the bottom line. Going forward, health systems need solutions to bring data together and make it useful throughout the entire revenue cycle.

Laura Remington is a writer and editor at Dimensional Insight. Her many years as a journalist took her from Capitol Hill to California's vineyards to glacier trekking in New Zealand. She graduated from Brown University.